- By Peter Bachmann •
Earlier this week, U.S. Trade Representative Katherine Tai met in Baltimore with her British counterpart, Secretary of State for International Trade Anne-Marie Trevelyan to hold a dialogue around strengthening the U.S.-UK trade relationship. Prior to the Monday roundtable held with Chamber of Commerce and union representatives, the two toured the Port of Baltimore.
“It has never been more important for us to work to strengthen our economic ties with our closest allies – like the United Kingdom,” said Ambassador Tai. “In that spirit, today and tomorrow, Secretary Trevelyan and I, along with our respective staffs, will seek to identify concrete steps to advance the U.S.-UK trade relationship.”
Secretary Trevelyan shifted gears and met with U.S. Commerce Secretary Gina Raimondo to further negotiations towards the removal of the U.S. Section 232 tariffs on steel and aluminum imports from the UK. Those tariffs were met with retaliatory tariffs on U.S. exports into the UK, including a 25 percent duty on all milled and broken rice shipped since June of 2018.
Following the meetings between Secretary Raimondo and Secretary Trevelyan, the Biden Administration announced that a deal was reached to remove tariffs on both sides of the Atlantic on June 1, 2022. A move supported by both USA Rice and the UK Rice Association.
“The U.S. rice industry applauds the Biden Administration for reaching a deal with the UK to bring these retaliatory tariffs to an end soon,” said USA Rice President & CEO Betsy Ward. “Our rice exports have been unnecessarily caught in the crossfire of the steel and aluminum trade wars for nearly four years, impacting decades of business relations with our customers in Europe. With rising inflation, skyrocketing input costs and uncertainty all around us, the lifting of this burden is welcome news. We believe this will help pave the road for U.S.-UK Free Trade Agreement negotiations to restart and further deepen our trans-Atlantic relationship.”
Currently, U.S. rice has access to the UK market through a limited duty-free milled rice quota or outside the quota, where it’s subject to Most Favored Nation tariffs. A comprehensive Free Trade Agreement with the UK would provide an opportunity to achieve duty-free and quota-free access for U.S. rice exports. Per capita consumption of rice is growing in the UK, a market that eats but does not grow any rice, and the U.S. has a strong existing customer base that would benefit from freer trade.
“We are delighted that this dispute has been brought to a conclusion,” said Alex Waugh, director of the UK Rice Association. “Through flexible use of brown rice imports milled in the UK, we have been able to maintain supplies to key customers for U.S. rice in Britain, which will help now that normal trading relationships have been restored. We look forward to the further opportunities that will develop as we deepen our trade partnership in the coming years.”
Exports of U.S. milled rice to the UK have suffered over the last four years with just minimal tonnage flowing through the U.S. country-specific quota, operated through the Association for the Administration of Rice Quotas, Inc. U.S. sales in recent years (with the exception of 2019) have ranged between 20,000 and 30,000 metric tons of primarily brown rice, entering at a lower duty and without a retaliatory tariff. The next UK quota auction for July 2022 shipments is scheduled for May 5.
The removal of the retaliatory tariffs for U.S. rice is the second in the last several months, following the January 1, 2022, lifting of extra tariffs for shipments bound for the European Union. Turkey and China are the remaining markets with a 25 percent retaliatory duty for imports of U.S. rice. Unfortunately, there are no signs of interest by the Administration to engage in talks to remove the tariffs.